Economy of Liberia
Encyclopedia
The First Liberian Civil War in 1989-96 destroyed much of Liberia
's economy, especially the infrastructure in and around Monrovia. Many businessmen fled the country, taking capital and expertise with them. Some returned during 1997. Many will not return. Richly endowed with water
, mineral
resources, forest
s, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products, while local manufacturing, mainly foreign owned, had been small in scope. The democratically elected government, installed in August 1997, inherited massive international debts and currently relies on revenues from its maritime registry to provide the bulk of its foreign exchange earnings. The restoration of the infrastructure and the raising of incomes in this ravaged economy depend on the implementation of sound macro- and micro-economic policies of the new government, including the encouragement of foreign investment.
's economy, especially the infrastructure in and around the capital, Monrovia
. Many businesses fled the country, taking capital and expertise with them, but with the conclusion of fighting and the installation of a democratically-elected government in 2006, some have returned. Richly endowed with water, mineral resources, forests, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products - primarily raw timber and rubber. Local manufacturing, mainly foreign owned, had been small in scope. President Ellen Johnson Sirleaf, a Harvard-trained banker and administrator, has taken steps to reduce corruption, build support from international donors, and encourage private investment. Embargoes on timber and diamond exports have been lifted, opening new sources of revenue for the government. The reconstruction of infrastructure and the raising of incomes in this ravaged economy will largely depend on generous financial and technical assistance from donor countries and foreign investment in key sectors, such as infrastructure and power generation.
of 1980, the country's economic growth
rate has slowed down because of a decline in the demand for iron ore on the world market and political upheavals in Liberia. Liberia's foreign debt amounts to more than $3 billion.
Timber
and rubber
are Liberia's main export items since the end of the war. Liberia earns more than $100 million and more than $70 million annually from timber and rubber exports, respectively. Alluvial diamond and gold mining activities also account for some economic activity.
Being the second-largest maritime licenser in the world with more than 1,700 vessels registered under its flag, including 35% of the world's tanker fleet, Liberia earned more than $18 million from its maritime program in 2000. The Liberian Government has declared in recent months that it has discovered sizable amounts of crude oil along its Atlantic coast.
Liberia's business sector is largely controlled by foreigners mainly of Lebanese
and India
n descent. There also are limited numbers of Chinese
engaged in agriculture. The largest timber concession, Oriental Timber Corporation (OTC), is Indonesian owned. There also are significant numbers of West Africa
ns engaged in cross-border trade.
Liberia is a member of the Economic Community of West African States
(ECOWAS). With Guinea
and Sierra Leone
, it formed the Mano River Union
(MRU) for development and the promotion of regional economic integration. The MRU became all but defunct because of the Liberian civil war which spilled over into neighboring Sierra Leone and Guinea.
Liberia has relied heavily on vast amounts of foreign assistance, particularly from the United States
, Japan
, Britain
, France
, Italy
, Germany
, the People's Republic of China
, and Romania
. But because of the Liberian Government's perceived disregard for human rights
, foreign assistance to Liberia has declined drastically. The Republic of China (Taiwan)
and Libya
are currently the largest donors of direct financial aid to the Liberian Government. However, significant amounts of aid continue to come in from Western countries through international aid agencies and non-governmental organizations, avoiding direct aid to the government.
The United Nations
imposed sanctions on Liberia in May 2001 for its support to the rebels of the Revolutionary United Front
(RUF) in neighboring Sierra Leone.
Unlike almost all other countries in the world, Liberia has not adopted the metric system
as its primary system of measurement.
In March 2010, Bob Johnson
, founder of BET, funded the first hotel constructed in Liberia in 20 years. The 13 acres (52,609.2 m²) luxury resort was built in the Paynesville section of Monrovia.
Liberia
Liberia , officially the Republic of Liberia, is a country in West Africa. It is bordered by Sierra Leone on the west, Guinea on the north and Côte d'Ivoire on the east. Liberia's coastline is composed of mostly mangrove forests while the more sparsely populated inland consists of forests that open...
's economy, especially the infrastructure in and around Monrovia. Many businessmen fled the country, taking capital and expertise with them. Some returned during 1997. Many will not return. Richly endowed with water
Water
Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...
, mineral
Mineral
A mineral is a naturally occurring solid chemical substance formed through biogeochemical processes, having characteristic chemical composition, highly ordered atomic structure, and specific physical properties. By comparison, a rock is an aggregate of minerals and/or mineraloids and does not...
resources, forest
Forest
A forest, also referred to as a wood or the woods, is an area with a high density of trees. As with cities, depending where you are in the world, what is considered a forest may vary significantly in size and have various classification according to how and what of the forest is composed...
s, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products, while local manufacturing, mainly foreign owned, had been small in scope. The democratically elected government, installed in August 1997, inherited massive international debts and currently relies on revenues from its maritime registry to provide the bulk of its foreign exchange earnings. The restoration of the infrastructure and the raising of incomes in this ravaged economy depend on the implementation of sound macro- and micro-economic policies of the new government, including the encouragement of foreign investment.
Summary
Civil war and government mismanagement destroyed much of LiberiaLiberia
Liberia , officially the Republic of Liberia, is a country in West Africa. It is bordered by Sierra Leone on the west, Guinea on the north and Côte d'Ivoire on the east. Liberia's coastline is composed of mostly mangrove forests while the more sparsely populated inland consists of forests that open...
's economy, especially the infrastructure in and around the capital, Monrovia
Monrovia
Monrovia is the capital city of the West African nation of Liberia. Located on the Atlantic Coast at Cape Mesurado, it lies geographically within Montserrado County, but is administered separately...
. Many businesses fled the country, taking capital and expertise with them, but with the conclusion of fighting and the installation of a democratically-elected government in 2006, some have returned. Richly endowed with water, mineral resources, forests, and a climate favorable to agriculture, Liberia had been a producer and exporter of basic products - primarily raw timber and rubber. Local manufacturing, mainly foreign owned, had been small in scope. President Ellen Johnson Sirleaf, a Harvard-trained banker and administrator, has taken steps to reduce corruption, build support from international donors, and encourage private investment. Embargoes on timber and diamond exports have been lifted, opening new sources of revenue for the government. The reconstruction of infrastructure and the raising of incomes in this ravaged economy will largely depend on generous financial and technical assistance from donor countries and foreign investment in key sectors, such as infrastructure and power generation.
In greater depth
The Liberian economy had relied heavily on the mining of iron ore prior to the civil war. Liberia was a major exporter of iron ore on the world market. In the 1970s and 1980s, iron mining accounted for more than half of Liberia's export earnings. Since the coup d'étatCoup d'état
A coup d'état state, literally: strike/blow of state)—also known as a coup, putsch, and overthrow—is the sudden, extrajudicial deposition of a government, usually by a small group of the existing state establishment—typically the military—to replace the deposed government with another body; either...
of 1980, the country's economic growth
Economic growth
In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...
rate has slowed down because of a decline in the demand for iron ore on the world market and political upheavals in Liberia. Liberia's foreign debt amounts to more than $3 billion.
Timber
Timber
Timber may refer to:* Timber, a term common in the United Kingdom and Australia for wood materials * Timber, Oregon, an unincorporated community in the U.S...
and rubber
Rubber
Natural rubber, also called India rubber or caoutchouc, is an elastomer that was originally derived from latex, a milky colloid produced by some plants. The plants would be ‘tapped’, that is, an incision made into the bark of the tree and the sticky, milk colored latex sap collected and refined...
are Liberia's main export items since the end of the war. Liberia earns more than $100 million and more than $70 million annually from timber and rubber exports, respectively. Alluvial diamond and gold mining activities also account for some economic activity.
Being the second-largest maritime licenser in the world with more than 1,700 vessels registered under its flag, including 35% of the world's tanker fleet, Liberia earned more than $18 million from its maritime program in 2000. The Liberian Government has declared in recent months that it has discovered sizable amounts of crude oil along its Atlantic coast.
Lebanon
Lebanon , officially the Republic of LebanonRepublic of Lebanon is the most common term used by Lebanese government agencies. The term Lebanese Republic, a literal translation of the official Arabic and French names that is not used in today's world. Arabic is the most common language spoken among...
and India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
n descent. There also are limited numbers of Chinese
Overseas Chinese
Overseas Chinese are people of Chinese birth or descent who live outside the Greater China Area . People of partial Chinese ancestry living outside the Greater China Area may also consider themselves Overseas Chinese....
engaged in agriculture. The largest timber concession, Oriental Timber Corporation (OTC), is Indonesian owned. There also are significant numbers of West Africa
West Africa
West Africa or Western Africa is the westernmost region of the African continent. Geopolitically, the UN definition of Western Africa includes the following 16 countries and an area of approximately 5 million square km:-Flags of West Africa:...
ns engaged in cross-border trade.
Liberia is a member of the Economic Community of West African States
Economic Community of West African States
The Economic Community of West African States is a regional group of fifteen West African countries. Founded on 28 May 1975, with the signing of the Treaty of Lagos, its mission is to promote economic integration across the region....
(ECOWAS). With Guinea
Guinea
Guinea , officially the Republic of Guinea , is a country in West Africa. Formerly known as French Guinea , it is today sometimes called Guinea-Conakry to distinguish it from its neighbour Guinea-Bissau. Guinea is divided into eight administrative regions and subdivided into thirty-three prefectures...
and Sierra Leone
Sierra Leone
Sierra Leone , officially the Republic of Sierra Leone, is a country in West Africa. It is bordered by Guinea to the north and east, Liberia to the southeast, and the Atlantic Ocean to the west and southwest. Sierra Leone covers a total area of and has an estimated population between 5.4 and 6.4...
, it formed the Mano River Union
Mano River Union
The Mano River Union is an international association established in 1973 between Liberia and Sierra Leone. In 1980, Guinea joined the union. The goal of the Union was to foster economic cooperation among the countries...
(MRU) for development and the promotion of regional economic integration. The MRU became all but defunct because of the Liberian civil war which spilled over into neighboring Sierra Leone and Guinea.
Liberia has relied heavily on vast amounts of foreign assistance, particularly from the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
, Britain
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...
, and Romania
Romania
Romania is a country located at the crossroads of Central and Southeastern Europe, on the Lower Danube, within and outside the Carpathian arch, bordering on the Black Sea...
. But because of the Liberian Government's perceived disregard for human rights
Human rights
Human rights are "commonly understood as inalienable fundamental rights to which a person is inherently entitled simply because she or he is a human being." Human rights are thus conceived as universal and egalitarian . These rights may exist as natural rights or as legal rights, in both national...
, foreign assistance to Liberia has declined drastically. The Republic of China (Taiwan)
Republic of China
The Republic of China , commonly known as Taiwan , is a unitary sovereign state located in East Asia. Originally based in mainland China, the Republic of China currently governs the island of Taiwan , which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu and other minor...
and Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
are currently the largest donors of direct financial aid to the Liberian Government. However, significant amounts of aid continue to come in from Western countries through international aid agencies and non-governmental organizations, avoiding direct aid to the government.
The United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
imposed sanctions on Liberia in May 2001 for its support to the rebels of the Revolutionary United Front
Revolutionary United Front
The Revolutionary United Front was a rebel army that fought a failed eleven-year war in Sierra Leone, starting in 1991 and ending in 2002. It later developed into a political party, which existed until 2007...
(RUF) in neighboring Sierra Leone.
Unlike almost all other countries in the world, Liberia has not adopted the metric system
Metric system
The metric system is an international decimalised system of measurement. France was first to adopt a metric system, in 1799, and a metric system is now the official system of measurement, used in almost every country in the world...
as its primary system of measurement.
In March 2010, Bob Johnson
Robert L. Johnson
Robert L. Johnson is an American business magnate best known for being the founder of television network Black Entertainment Television , and is also its former chairman and chief executive officer...
, founder of BET, funded the first hotel constructed in Liberia in 20 years. The 13 acres (52,609.2 m²) luxury resort was built in the Paynesville section of Monrovia.